Segment Information

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

Segment Information

Note 17—Segment Information

Our business is managed based on customer-facing sales channels to align with how we support our customers. Our chief operating decision maker ("CODM"), who is the CEO of the Company, makes decisions and assesses the performance of the Company reviewing two segments: Business and Mass Markets. Our reportable segments have not been aggregated.

Under our Business segment we provide products and services to meet the needs of our enterprise and wholesale customers under five distinct sales channels: Large Enterprise, Mid-Market Enterprise, Public Sector, Wholesale and International and Other. For Business segment revenue, we report the following product categories: Grow, Nurture, Harvest and Other, in each case through the sales channels outlined above. The Business segment included the results of our Latin American, ILEC and EMEA businesses prior to their sales on August 1, 2022, October 3, 2022 and November 1, 2023, respectively.

Under our Mass Markets Segment, we provide products and services to residential and small business customers. We report the following product categories: Fiber Broadband, Other Broadband and Voice and Other. The Mass Markets segment included the results of our ILEC business prior to its sale on October 3, 2022.

See detailed descriptions of these product and service categories in Note 4—Revenue Recognition.

As described in more detail below, our segments are managed based on the direct costs of providing services to their customers and directly associated headcount and non-headcount operating expenses. Shared costs are managed separately and included in "other unallocated expense" in the table included below "—Revenue and Expenses." As referenced above, we reclassified certain prior period amounts to conform to the current period presentation. See Note 1—Background and Summary of Significant Accounting Policies for additional detail on these changes. The CODM uses adjusted EBITDA as the key indicator in assessing performance and allocating resources for both the Business segment and Mass Markets segment.

The following tables summarize our segment results for 2024, 2023 and 2022 based on the segment categorization we were operating under at December 31, 2024.

	Year Ended December 31, 2024
	Business		Mass Markets
	(Dollars in millions)
Segment revenue	$	10,363	2,745
Segment expense
Cost of services and products	3,063		69
Headcount costs	1,237		651
Non-headcount costs	652		572
Total expense	4,952		1,292
Total segment adjusted EBITDA	$	5,411	1,453

	Year Ended December 31, 2023
	Business		Mass Markets
	(Dollars in millions)
Segment revenue	$	11,583	2,974
Segment expense
Cost of services and products	3,248		79
Headcount costs	1,473		768
Non-headcount costs	807		610
Total expense	5,528		1,457
Total segment adjusted EBITDA	$	6,055	1,517

	Year Ended December 31, 2022
	Business		Mass Markets
	(Dollars in millions)
Segment revenue	$	13,099	4,379
Segment expense
Cost of services and products	3,436		121
Headcount costs	1,584		945
Non-headcount costs	879		703
Total expense	5,899		1,769
Total segment adjusted EBITDA	$	7,200	2,610

Revenue and Expenses

Our segment revenue includes all revenue from our two segments as described in more detail above. Our segment revenue is based upon each customer's classification. We report our segment revenue based upon all services provided to that segment's customers. Our segment expenses include (i) specific cost of service expenses incurred as a direct result of providing services and products to segment customers, (ii) headcount costs, which primarily includes salaries, commissions, and group insurance, and (iii) non-headcount costs, which primarily includes legal and other professional fees, marketing and advertising expenses, other network related expenses, and external commissions. We have not allocated assets or debt to specific segments.

The following items are excluded from our segment results, because they are centrally managed and not monitored by or reported to our chief operating decision maker by segment:

•network expenses not incurred as a direct result of providing services and products to segment customers and centrally managed expenses such as Finance, Human Resources, Legal, Marketing, Product Management and IT, all of which are reported as "other unallocated expense" in the table below;

•depreciation and amortization expense;

•goodwill or other impairments;

•interest expense;

•stock-based compensation; and

•other income and expense items.

The following table reconciles total segment adjusted EBITDA to net loss for the years ended December 31, 2024, 2023 and 2022:

	Years Ended December 31,
	2024		2023	2022
	(Dollars in millions)
Total segment adjusted EBITDA	$	6,864	7,572	9,810
Depreciation and amortization	(2,956)		(2,985)	(3,239)
Goodwill impairment	—		(10,693)	(3,271)
Other unallocated expense	(3,419)		(3,426)	(3,107)
Stock-based compensation	(29)		(52)	(98)
Operating income (loss)	460		(9,584)	95
Total other expense, net	(690)		(653)	(1,086)
Loss before income taxes	(230)		(10,237)	(991)
Income tax (benefit) expense	(175)		61	557
Net loss	$	(55)	(10,298)	(1,548)

We do not have any single customer that comprises more than 10% of our consolidated total operating revenue.

The assets we hold outside of the U.S. represent less than 10% of our total assets. Revenue from sources outside of the U.S. comprises less than 10% of our total operating revenue.